John Cridland, director-general of the CBI, said before his organisation’s annual conference that five years of falling living standards had made the public less tolerant of the corporate world Photograph: Linda Nylind for the Guardian

The head of Britain's leading employers' group has told business it must act as the champion of consumers if it is to begin the generation-long process of rebuilding a reputation battered by the failures and perceived excesses of recent years.

John Cridland, director-general of the CBI, used an interview before his organisation's annual conference to warn that five years of recession, sluggish recovery and falling living standards had made the public far less tolerant of the corporate world.

Tracing the start of the downward slide in the reputation of business back to the "naked capitalism" of the late 1980s, Cridland said companies needed to reach out to their shareholders, become more transparent in their dealings and deliver for their customers.

Cridland believes the recent party conference season marked the start of the run-in to the 2015 election, and said business was likely to come under scrutiny as politics became more short-termist and opportunistic. "In the good times, everybody was floating upwards," he said. "People were more tolerant of the fact that some were doing better than others. But people are now less tolerant of poor performance and perceived excess. Most people are not floating upwards and that puts a spotlight on failure and excess."

Cridland said business needed to get closer to its customers through more competition and greater transparency. "Who should really speak up for the consumer? In my view it should be business. We need to be consumer champions and get off the back foot."

Noting that in sectors such as banking and energy the public was questioning whether markets were delivering for them, Cridland said competition was the key to innovation, while being open would give business a story to tell. "I think we have to show and tell in order to do."

He said there had been changes in executive pay, where packages now tended to include long-term incentives, clawbacks and pay based on sustainable performance. "Over time, I think business is growing more sensitive. But it took a generation to end up where we are. It is a generation-long job to change perceptions."

Cridland traced the start of the downward slide in the reputation of business to the late 1980s. "It was the time of the entrepreneurial revolution, of market liberalisation and the new approach in the City. We had a more naked capitalism than we had in the 1960s and 1970s. It means there is more of a challenge for business. There is no easy solution to rebuilding confidence. But does it need to happen? Yes it does."

Business was upbeat about the prospects for the economy, with a real sense that economic recovery was at last becoming embedded, Cridland said. But despite the longest and most acute squeeze on real wages since the 1970s, he said workers needed to be patient.

"Raising living standards is a big political issue and business is at the heart of it. Although I'm confident about the upturn in growth, the view of business is that we have to get the growth first before you start spending the fruits of growth." The pickup in output, he added, was slow and steady rather than spectacular.

With George Osborne's autumn statement due in little more than a month, Cridland called on the chancellor to boost business by limiting next year's rise in business rates to 2%, at a cost of £300m, and by helping energy-intensive manufacturers with their energy costs.

Business was less concerned about the cost of energy bills going up than with the lights going out owing to insufficient capacity, he said. Bemoaning the tendency of governments to defer decisions on the building of new power stations, he said: "We are leaving it pretty late. There are things we can do. It is not inevitable that the lights go out. But we have used up a lot of the contingency time."

Cridland said the next year would be vital and called for cross-party consensus on "half a dozen industrial Olympics" – an national infrastructure plan for energy supply and new airport and transport capacity.